Trade and Industry written question – answered at on 21 January 2004.
To ask the Secretary of State for Trade and Industry
(1) what assessment she has made of the feasibility of capping annual percentage rates on credit cards but not on short-term loans;
(2) when she expects the research which her Department have commissioned into the way interest ceilings work in other EU countries will be completed.
The Government are not persuaded of the benefits of introducing interest rate ceilings for credit products of any type. A rate ceiling could actually encourage rates to gravitate towards the ceiling, causing detriment to consumers and competition. It might also encourage lenders to make the cost of credit more expensive to consumers in other ways (for example by introducing higher charges), or lead some lenders to exit the market, denying some consumers access to credit.
However, the Government have commissioned research into the way these interest ceilings operate in other countries. It is anticipated the research will be published in the spring of this year.
Yes1 person thinks so
No0 people think not
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